Australian gold mining firm St Barbara is in negotiations to hand over its Gold Ridge mine in central Guadalcanal back to the Solomon Islands Government.
The move by St Barbara comes after the mine was hit by a series of setbacks such as when Cyclone Ita hit the mine in April this year, causing floods and damaging infrastructure at the site, which forced the company to suspend operations.
This was followed by illegal miners and local communities entering the mine site, raising security and associated safety concerns, which prompted the company to withdraw all its workers from the site and reduce the workforce from around 570 to 160. St Barbara was then considering discussions with the government on the future of mine.
Speaking on negotiations, Solomon Islands' Prime Minister Gordon Darcy Lilo told Radio Australia's Pacific Beat programme that: "St Barbara is a very respected company, but up until recently they have now come to a point where they have decided to negotiate with the government to hand over the investment back to the Solomon Islands Government and we respect that.
"We can work hard to ensure that the regime to regulate the mining sector in Solomon Islands is cleaned up.
"We (need to) ensure that all stakeholders can see things in a more transparent and accountable way to give greater confidence for better quality and a strong investor to be able to come and develop this gold mine."
The company said in a statement: "St Barbara confirms that constructive negotiations for the mutual benefit of both parties are continuing.
"Operations at the mine remain suspended."
Meanwhile, the Australian Government has come to the rescue of the mine, stating that it plans to spend an additional $2m to help the mine recover from the floods and related damage.